There's a better way to fund health regions, and it will save thousands of lives
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Michel Grignon is an expert advisor with EvidenceNetwork.ca, an associate professor with the departments of Economics and Health, Aging & Society at McMaster University and Director of the Centre for Health Economics and Policy Analysis (CHEPA). He contributed to the research published by CIHI.

When a health care system cannot make the best use of resources at its disposal, consequences can be dire, and such is the case with the Canadian health system. A recent study from the Canadian Institute for Health Information (CIHI) found that between 12,600 and 24,500 deaths could be prevented each year in Canada if our health system were perfectly efficient. This is, without spending a penny more than what we spend now, without increasing the contributions made by Canadians to their provincial public health care systems, we could be saving thousands of lives.

To reach that conclusion, expenditures on various types of health care services, including hospital care, physician and nurse services, prescription drugs, and nursing homes were measured. Also measured were the number of premature deaths across 84 small regions in Canada – deaths taking place before the age of 80 and due to causes that are treatable, such as diabetes, pneumonia and asthma (but not lung cancer). The study then compared how different regions spend their health care dollars and found that the average region could improve what it does by between 18 and 35 per cent – and save lives in the process. Who said health policy was boring?

The study also detailed the drivers of inefficiency, and they might be a surprise to many. Contrary to what is typically assumed, efficiency is not only based on how hard and how smart the people involved in a system work – hospital and institution managers, doctors, nurses and regional health authorities – but also may be linked to factors beyond their control.

Of course, a region that works hard at monitoring stays in hospitals to make sure they are not unduly prolonged, while maintaining quality so that re-admissions after discharge are not too frequent, will be able to prevent more premature deaths for the same level of expenses. Similarly, a region that controls the proportion of specialists among its physician work force (thus making sure patients can access family doctors) will prevent more deaths. And a region that makes sure individuals at the bottom of the income distribution get access to their family doctors will also save more lives for the same amount of dollars spent.

However, regions also operate within constraints they can only partially control. For instance, a higher rate of smokers or physically inactive individuals in the population of a region will eat up more resources with poorer outcomes, including premature deaths. For example, when more individuals smoke, it costs more to prevent deaths due to asthma; similarly, it costs more to prevent deaths due to diabetes when more people are obese.

Another significant factor that affects health outcomes, and which health authorities cannot control, is income. Health regions in which the population has higher income on average are less efficient than those in which the population has lower income. This could be because regions with wealthier populations are using their resources in ways that are not reducing premature deaths, but may be achieving other goals, such as faster access to advanced technologies or hip replacement procedures. Similarly, regions with higher proportions of immigrants, non-aboriginal individuals or individuals with higher education manage to save more lives with the same level of expenditures, because these populations have lower mortality rates than the rest of Canadians, on average.

What can we do with such findings? First, we need to learn from the best health regions across the country how to monitor hospital stays (length and quality), guarantee access to family doctors for the poor, and make sure family physicians make up a reasonable proportion of the physician work force. Secondly, we need to invest in public health – not necessarily spending more – by finding ways to curb smoking rates, obesity rates, and to encourage physical activity.

Finally – and perhaps, most importantly – we need to re-think the way we allocate resources to regions in Canada. Not all regions require similar resources for the health of their populations. Regions who attract fewer immigrants, have more aboriginals in their population, and fewer individuals with higher education should receive more funding per capita because it costs more than in other regions to achieve similar levels of health gains. Conversely, regions with more immigrants, fewer aboriginals, and more highly educated individuals don’t need the same health care dollars to get the same results.

Equality and equity are not the same thing where health is concerned. It’s time we spread the health dollars where they are needed most.